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Information Technology Research Journal Vol 1(1) pp. 1 - 12 June 2011
Available online http://www.resjournals.com/itj
©2011 International Research Journals
Full Length Research Paper
Significance of Communication and E-Business in
Second Life Virtual World
Sharma Gajendra, Qiang Ye, Wenjun Sun and Zhao Daying
School of Management Harbin Institute of Technology 92 West Dazhi Street, Nangang District, Harbin, 150001,
Corresponding Author Email: [email protected], China, Tel: +86 1512 4506371
Abstract
Second Life is an online 3D virtual world imagined and created by its residents. Virtual world is a computer
based simulated environment where avatars can communicate each other through different communication
media. The aim of the current study is to investigate why individual and companies communicate in Second
Life virtual world and opportunities of e-business. The most common communication media in Second Life are
voice, instant messaging and video conferencing. The major theoretical background used in this study was the
communication theory and social systems, theory of intrinsic motivation and word of mouth communication.
Success story of some real world companies and experiences of business professionals in Second Life were
included in this study. Video conferencing was the choice of real world companies to conduct online business
events. Initial capital investment, sufficient time engagement and quality of products were equally important in
Second Life as in real world. Moreover, advertising, customer relation, after sales service and consumer traffic
are mandatory for e-business promotion. The findings provided that communication in virtual environment
plays a crucial role for social networking and growth of real world business. The communication in real world
has significance to policy makers, managers and leaders for information sharing and decision making.
Keywords: Second Life, virtual world, communication, e-business, social networking
Managerial relevance statement
The findings of the manuscript was focused on the
efficiency and superiority of communication in Second
Life virtual world among other social networking sites
such as Facebook, Myspace, Twitter and Youtube and its
significance on real world business. The study provided
that communication in virtual environment plays pivotal
role for social networking and e-business growth. The
outcome of the work is highly significant for managers,
policy makers and leaders for sharing information,
manage information and decision making. E-business in
Second Life through effective communication such as
online events, training and education has direct impact on
real world economy. Moreover, Second Life is an
appropriate platform for researchers to perform numerous
research opportunities on information system, social
science, engineering, psychology and marketing. The
result also suggests that second life has much more
freedom to perform e-business and social activities.
Communication plays pivotal for the existence and
standing of virtual worlds.
INTRODUCTION
Second Life is an online virtual world electronic
environment, developed by US based Linden lab in 2003.
Virtual worlds are creation of mind and place for people’s
imagination. There are more than one hundred virtual
worlds in computer simulated environment. Second Life
is one of the leading and rapidly growing virtual worlds.
Second Life is also called a Massively Multiplayer Online
Role Playing Game (MMORPG) where people have fun
and entertainment and play games. Virtual worlds are
online communities in which residents communicate in
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Info. Technol. Res. J.
simulated environment (Chesney et al, 2007.) Virtual
worlds work over the internet and everyone around the
glove can access easily. Lastowka and Hunter (2004)
described virtual worlds as places where millions of
people come to play, trade, create, and socialize.
According to Barnes (2007) virtual worlds belong to
the fantasy-oriented category of virtual communities. The
population of virtual worlds has grown rapidly since 1996.
In the meantime, several million people have registered
in virtual worlds. There are many virtual worlds on the
Internet, for example, The Sims Online, Everquest,
Lineage and Ultima Online. Moreover, There.com’s
There, the fantasy world of Norrath (Sony’s Everquest),
the interstellar expanses of the Milky Way (Electronic
Art’s Earth and Beyond), and a galaxy far away (Sony’s
Star Wars Galaxies) are examples of virtual world
(Lastowka and Hunter 2005). The virtual worlds are built
to access different age group of users ranging from kids
to middle-aged or even older people. In virtual worlds,
each resident is represented by a 3D character called
avatar which can communicate with each other for
socialization or business purposes on virtual sims.
Avatars are designed mainly for social interaction. They
communicate with each other either through text (local
chat), instant messaging and voice. Avatars can
communicate with others through body language.
All the contents in Second Life are user created. The
residents can make and design virtual clothes and
houses as per their imagination. Linden scripting
language (LSL) can be used to create any type of objects
and services. LSL code looks like C, Java Script or the
Action Script language used in flash animation. Avatar
animations can also be triggered by an LSL script. Best
Second Life designers learn how to create buildings and
scenes that look attractive and download quickly. People
have the intellectual property right to protect and prevent
their creations. Thus all type of the real world activities
are well mirrored in Second Life (Cheal, 2007). With real
world businesses moving to virtual worlds, real world
governments are now also becoming interested in virtual
worlds (Bray and Konsynski, 2007). The governments of
the Maldives and Sweden have opened official
embassies in Second Life.
Virtual business or v-business refers to a business
inside virtual environment. This is defined as a process to
provide products or services in order to generate revenue
as an objective of making profit (Rappa 2008). Products
are virtual but the real revenue can be earned. Most
people think of virtual worlds as just a game but they are
evolving toward a society in which social and economic
interactions are the main drivers (Zimmer 2007).
Residents can run global business in real time. Virtual
worlds are inspiring both organization and individual to
make revenue. The real world companies such as Nissan
has been designing and testing new concept of cars.
Banks such as ABN Amro and Meta Bank have been
facilitating to open account, deposit and withdraw virtual
funds. Some universities have been providing online
lectures. Residents are running shops, clubs and
recreation sites. Some of them are working as a
programmer and designer. There is a huge opportunity of
education and training, meeting and collaboration as well
as marketing and product testing.
The motivation to conduct current study is that Second
Life is the latest innovation of information communication
technology based on 3D virtual world and outcome of
web 2.0 social networks. There have been a numerous
research activities in Second Life for IT professionals,
managers and business practitioners. Second Life is
considered as world laboratory to test real world products
and services. The users in Second Life have much more
freedom to create and test new products and services.
They can buy and sell many types of products and make
online revenue. Real world companies enter Second Life
to test and offer their products which is helpful for brand
promotion.
There have been performed a limited number of
researches on Second Life communication. Some
previous researches are focused on interactivity through
online virtual game. People often play online games for
fun and enjoyment and spend time. Online game story,
graphics, length and control are highly related to
enjoyment and have a significant impact on behavioral
intention (Hui et al, 2008). The communication plays vital
role during game playing. Some of the important factors
are feeling of telepresence, enjoyment, immersion and
participation from a distance. Virtual world reduces the
time consumption in real world. As a result, people spend
less time in real life enjoyment and communication (Wui
et al, 2009). Steve et al. (2008) (steve et al, 2008)
developed ICT networking project to demonstrate
collaboration opportunities in Second Life. Thus it was
learnt that previous researches are inadequate and
inconclusive on communication research. Some of the
previous researches were performed on virtual reality,
virtual community and social networking enlightening
human avatar relationship.
The research question of the current study is to
investigate why individual and companies communicate
in Second Life and opportunities of e-business in virtual
environment. The significance of the study is that Second
Life is a suitable place for business strategy, social
interaction, sharing culture and idea among different
people residing at different parts of the world and to
motivate them to join Second Life. It enables to increase
the brand of the products, present organizational
information, and provide training and learning skills.
Communication is responsible to conduct social and
business activities in virtual world. People can participate
on distance education and have new experiences and
opportunities. Most of the information is social such as
asking
questions,
receiving
feedback
and
recommendation and culture sharing. According to
Linden lab, the monetary transaction of more than US$
Gajendra et al
1.5 million takes place in Second Life everyday. The
virtual business has been greatly affecting the real world
economy (castronoval, 2003). Second Life has
potentiality of business communication, information
dissemination and innovation.
3
managers believe that knowledge bears strategic
competitive advantage. Bass (1669) (Bass, 1999) stated
that the new users in Second Life are ‘innovators’ or
‘early adopters’. Clemons (2009) (Clemons, 2009) states
that the “behavior of individuals in online networks can be
very different from the behavior of the same individuals
interacting in a more traditional social network”.
RELATED WORKS
Social networking
Communication in Second Life
Second Life is globally shared enabling people to
perceive and utilize the environment (Messinger et al,
2009). The traditional advertising network is being
replaced by modern electronic social networks, and
behavior of individual in online networks can be different
from the behavior of the same person in traditional social
network (Clemons, 2009). In this connection, the
communication behavior in real life and virtual life
becomes different. Some researches on Second Life
have been performed on development and evaluation of
virtual campus for learning environment (Lucia, 2009).
Virtual campuses are recreational, collaborative and
communicative zones. The result is focused on presence,
communication and awareness. In addition, it paid
attention on perceived sociality, virtual learning
environment, productivity and general satisfaction.
Barbara and Gloria (1997) (Barbara and Gloria, 2007)
formulated that the collaborative virtual environment can
be called as a social system. Avatar movement, nature of
turn making, virtual meetings, cultural formations and
communication in online communities are studied under
Multi User Domain (MUD).
Leimeister et al., (2004) (Barbara and Gloria, 2007)
found the success factors for establishing and managing
virtual communities. Virtual reality defines the concept of
presence and telepresence. Presence can be thought as
the experience of one’s physical environment. It can be
defined as the sense of being in an electronic
environment. Telepresence is referred to as the presence
in the environment through communication media (Held
and Durlach, 2007). There are two categories of users in
Second Life. One user group who remain for a long
period of time is called lifers. They might have long term
job and have strong social relationship. Another user
group who remain for a short period of time is called
casuals (Carman and Elena, 2009).
The development of web 2.0 technology helps for
policy makers, intelligent analysts and researchers to
better understand communication theory (Hsinchun et al,
2008). After the introduction of internet in 1990, the
development of social interaction sites took place. One of
them is Second Life, in which people have their virtual
identity and they can communicate with each other. Riva
(2000) (Riva, 1997) formulated that there are three types
of presence in virtual world: social, physical and copresence. The previous survey showed that 97% of
Word of mouth communication became an important
market force for consumer decision making. Word of
mouth is the formal transmission of ideas, opinions,
comments and information between two or more
individuals. “The consumer is an active participant in an
interactive exercise of multiple feedback loops and highly
immediate communication” (Valck et al, 2009). There is
the difference between avatar email and traditional email
communication. Avatar email has media richness and
social presence. Managers prefer rich medium (e.g. face
to face communication) rather than lean media
(Younghwak et al, 2007). Tradition email is a lean media.
People play online games to remove challenges, make
friends, spend time but the basic reason is to enjoy
.
(Davis et al, 2005) Second Life has scripting tool for
monitoring and controlling the entire communication
system. The podcast is an important communication
media to communicate from Second Life to real life
(Davis et al, 2005). Machinima is a video created by
avatars. Chatboats are artificial intelligence (AI) based
software used for responding reference questions while
having facial expressions in virtual environment (Kim et
al, 2002).
In Second Life voice communication is important than
text. Birdwhistell (1970) [25] stated that 65% of
information takes place through facial expression and
remaining 35% through spoken words. Non verbal
communication is limited in Second Life. Facial
expressions are used to show reactions and these are
shown through gestures. Residents can walk, run, stand
and fly easily but animations and gestures are
sophisticated. Peter et al., (2007) [26] states that the
privacy and trust should be maintained in order to
encourage face to face meeting.
Telepresence is defined as the experience of
presence in an environment by means of a
communication medium. The environment can be
temporary, real or virtual (computer mediated). Heeter
(1992) (Heeter, 2008) describes three types of presence:
subjective personal presence, social presence and
synthetic presence. Robinett (1992) (Robinett, 1992)
made distinction between real and synthetic experience.
Held and Durlach (1992) (Held and Durlach, 2007) made
a remark that telepresence is common to teleoperation
and the experience of the virtual environment. By
employing concept of virtual reality, this is defined as a
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Info. Technol. Res. J.
simulated environment in which a user experiences
telepresence (Held and Durlach, 2007). Interactivity is
variable characteristics of communication and has great
concern to researchers (Heckel, 1991). The three
important factors that contribute to interactivity are speed,
range and mapping. The speed of time or response time
is very important in communication. Range can be
defined as the amount of change that can be affected to
the mediated environment. Mapping is referred to as the
way in which human actions have relation to actions
within a mediated environment (Norman, 1998).
Multimedia, computer technologies and high speed data
networks cause development of global village through
interaction.
E-Business opportunities
Web based technologies are useful to create new ecommerce for income generation and consumers
participation (Holsapple et al, 2005). Hemp (2006)
(Hemp, 2006) argued that the virtual worlds have future
importance for marketers. They become interactive,
collaborative and commercial platform for all. In this
connection, there is a huge opportunity of virtual ecommerce. Virtual world offers flexibility in brand building,
new product development, testing and advertisement
(Vedrashko, 2006). Avatars and virtual representations
play a pivotal role to conduct marketing activities in
Second Life and have numerous business opportunities
(Chambers, 2005). Virtual business is divided into three
parts: virtual stores to conduct virtual commerce, web
store to conduct e-commerce and brick and mortar store
to conduct physical commerce (Arakji and Lang, 2008).
The revenue status is that 80% of the money comes from
land and land maintenance fees and 20% comes from
subscription fees (Yi et al, 2008). Thus the web based
technologies have motivated users for generating and
engaging users. The researchers investigated that users
are able to get enjoyment through instant messaging (Li
et al, 2003) and online shopping but less attention has
paid to online gaming. Virtual worlds have significance in
electronic gaming and social networking, so this is called
a place as “information superhighway” (Messinger et al,
2009).
Virtual worlds are becoming popular everyday and they
are developing inworld economies offering different types
of business activities, called virtual commerce or vcommerce (Castranova, 2005). Virtual markets are
creating more advantages for them (Vedrashko, 2006)
and improving the firm performance (Warr, 2008). A
multidisciplinary approach is required to study synthetic
environments (Bray and
Konsynski, 2007). Virtual
presence may be advertisement or product placement
and business sponsored virtual activities (Vedrashko,
2006). The behavior of virtual avatars differs with real
world people in some extent (Clemons, 2009).
Second Life provides flexibility in brand building, new
product development and advertisement (Vedrashko,
2006). Second Life virtual world offers more than 100 real
life brands. The virtual presence may be advertisement or
product development and business sponsored virtual
activities (Clemons, 2009). Traditional advertising media
are loosing their impact due to the disability of revenue
generation. Modern advertising media such as online
social networks including Second Life are playing pivotal
role in making money, exchange information and
entertainment. In this connection, social networks have
been replacing traditional advertisement media
(Clemons, 2009).
Second Life virtual environment keeps relationship
between producers and consumers. The firms design,
produce and distribute products. The consumers in
another hand buy the products as per their interest and
budgetary limitations. The communication establishes
collaboration between producers and consumers. The
video games establish a favorable collaborative
environment between producers and consumers (Arakji
and Lang, 2008). Massively multiplayer online games are
technically feasible, economically suitable for both
producers and consumers to establish a favorable
collaborative environment. Online games on virtual world
are able to generate a good amount of revenue in real
life. Due to this reason, virtual worlds are important
source of emotional and material benefit [40].
With rich features of social networking and user
freedom, a large number of users are increasing
everyday in Second Life. Moreover, a large amount of
business transactions is taking place. Communication
plays a pivotal role in virtual world to perform social and
business activities. The synchronous communication in
Second Life is highly effective to perform business
activities in virtual environment.
THEORETICAL FOUNDATION
Communication theory and social system
Communication is the exchange of information from
source to the destination through channel. Lasswell
defines communication theory as “who says what to
whom in what channel with what effect”. Communication
research in Second Life has a broad scope to study
human behavior. The communication theory has been
reflected at the beginning of Socrates and Plato. Later,
Aristotle developed the theory of communication.
Nowadays, communication theory has wide application
on information systems, psychology, sociology, linguistic
and advertising. Many authors and researchers divide
communication by ‘context’ or ‘levels’ and human users
are ‘symbol users’ or symbol makers.
A social system is widely used term in sociological
systems theory. The basic requirement is that there
Gajendra et al
should be an interaction between at least two people.
Communication plays a vital role in Second Life social
systems. There are different methods of measuring
participation within social systems such as reach,
engagement and frequency of participation. All social
systems have commonalities. We can assume Second
Life as a place for social networking.
Theory of intrinsic motivation
Intrinsic motivation is the theory which can be described
as a motivation to engage in activities that enhance or
maintain a person’s self concept. It further states that the
reward of performing an activity is the process of the
activity itself and not an end result [41]. The factors that
promote intrinsic motivation are challenge, curiosity,
control, fantasy, competition and recognition. Intrinsic
motivation theorists divide motives into two global
categories: drives (also called extrinsic motivation) and
intrinsic motivation. Drives are biological survival links
whereas intrinsic motivation pertains to what some have
called ego motives. Some of the examples of drive are
hunger, thirst and pain. Whereas curiosity, autonomy and
play are examples of intrinsic motivation. The intrinsic
motivation is about competence or mastery. The Second
Life community is curious, competent and challenging.
So, individual and organizations are motivated to join
Second Life virtual world.
Motivation is required for residents to live in Second
Life for a long period of time. According to Markus (1994)
[42] the motivation is required to eliminate users’
conservatism, fear of changing the environment and lack
of involvement. The Second Life is a wide place for
entertainment and engagement. People may have fun,
interact with each other, make friends and form a social
group through communication media. The theory is
widely used to understand information system related
human behavior.
Word of mouth communication
Consumers interact with each other through internet to
share knowledge, experience and opinion. Word of
mouth is an important marketing tool for consumer
decision making. The marketing tool is useful for
marketers, managers and researchers for decision
making. Companies and consumers access online
network to have communication and interaction. Hoffman
and Novak (1996) (Hoffman, 1996) stated that “the
consumer is an active participant in an interactive
exercise of multiple feedback loops and highly immediate
communication.” Through online technology, information
can be transmitted worldwide at lower cost. In virtual
environment, friendship can be made, information is
gathered and collect opinion of experts. Information is
5
exchanged through other social networking sites such as
Myspace, Youtube, Facebook and Wikipedia. Virtual
communities play an important role for new product
development and consumers motivation. Blackwell et al.,
(2001) (Blackwell, 2001) stated that “World of mouth is
the informal transmission of ideas, comments, opinions
and information between two or more individuals, neither
one of which is a marketer”. Virtual communities can be
considered as a word of mouth networks. The impact of
world of mouth communication is characterized into two
parts: structural and interactional characteristics. The
structural characteristics include network size, number of
connections whereas interactional characteristics include
strength and degree of homophily among network
members. When people enter first time in virtual
environment, they are not familiar with the virtual
activities. So, they should engage in informational and
instrumental activities.
METHODOLOGY
E-Business opportunities in Second Life: Case Study
The current study is based on case study taken from
business professionals and reputed real world companies
entering Second Life for making revenue and brand
promotion. The study was conducted from October 4 to
November 3, 2010. The opinion of 20 participants and
case of 12 companies were included in this study. Online
conversation with Second Life residents was performed
introducing ourselves and research topic. Experienced
and professional users were selected for interview
verifying their profile information. Different regions of
Second Life were visited to have conversation with
business professionals and real world company
representatives. The open questionnaires were focused
on e-business experiences in Second Life and success of
brand promotion. The questionnaires were focused on
following points:
1. How effective is Second Life for communication?
2. Do you have experience to make real revenue in
Second Life?
3. What are the popular businesses in Second Life?
4. How successful is Second Life for e-business?
5. How virtual events are useful for business
promotion?
6. What are the future scope, problems and challenges
of Second Life?
Second Life has wide platform to conduct business
occupations. Some of the common business sources in
Second Life are party and wedding planner, pet
manufacturer, automotive manufacturer, fashion designer
and custom designer. Moreover, architect, XML coder,
scripter, game developer and tour guide make favorable
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Table 1. Examples of business in second life.
Organization
Industry
Title and source
Description
Anshe Chung
Studios
Virtual
Realestate
Second Life's First
Millionaire
Canimal
Zephyr
Fashion
Product developers in
virtual world
American
Apparel
Fashion
How Viable is Virtual
Commerce?
Ginko
Financial
Banking
The Dismal Economics
of Virtual Worlds
Anshe Chung Studios is a company
that emerged from inside a virtual
world. It has made approximately
one million real US dollars
speculating on virtual real estate.
Behind this avatar lies a real-world
company
located
in
China,
employing several dozen artists and
engineers .
Maya Hofner is a full time fashion
designer in Second Life. Her
creations for women and for men
are considered highly prestigious in
Second Life .
In mid 2006, American Apparel
opened a store in Second Life
offering
virtual
clothes.
But
immediately came pressure from
consumers and commentators to
integrate the virtual store with real
world purchases. It was forced to
provide real clothing discounts to
virtual clothing purchasers: most of
its virtual clothes sell only for less
than $1, about 270 Linden dollars
In August 2007, a genuine run on a
bank located in Second Life, and
that bank's collapse. Depositors
rushed to withdraw their funds from
the bank, their predicament drew
delighted attention
revenue in Second Life. Second Life has public and
private communication to conduct all the activities. The
benefit of communication is for personal meetings,
product simulations, trainings and to meet global
partners. Moreover, communication is used to receive
product feedback from clients, engage and raise funds
and build community.
Anshe Chung (real life name Ailin Graef), a German
resident was a first millionaire to earn real money in
Second Life. She made revenue through virtual real
estate dealings. She has gone real world with her
talents, starting Anshe Chung Studios, a 3D environment
developer with offices in Wuhan, China. Second Life aims
to be a user with opportunities for both business and
play. Linden lab has taken remarkable responsibility for
users to retain the copyright for their creation. Thus
Second Life has been attracting many entrepreneurs. A
Second Life resident Crucial Armitage says “when I found
out how expressive I could be in Second Life and that I
retain copyrights for the things I make, I knew I was in
Second Life to stay”. He created online clothes and sold
them. “My business has grown from a few bucks a month
two years ago to selling more than enough to live on now
and it’s growing every month” he says. He quitted 17 year
real life job as a supermarket manager to engage and
create business in Second Life. He is a landowner in
Second Life and bears 10 islands. He knows scripting
language well which is helpful to create objects. Dibbel,
another Second Life resident sells books and says that
there is an opportunity for B2B marketing. Most of the
work in virtual world business generates from networking
and building a list of contacts and friends as in real world.
Table 1 shows the examples of some business
opportunities in Second Life. Second Life can be adapted
to serve a real business purpose that supports corporate
commerce and marketing. Second Life presents enough
opportunities that corporate technology leader to pay
attention. The 3D web is stable and outcome of latest
technologies. New types of businesses are born on the
web, although the technology is new. Ms. Aimee Weber
is an experienced user in Second Life. She opened
clothing store and making revenue selling clothes.
Moreover, she has developed her own real estate in
areas such as Midnight City, where she rents out
storefront locations and lofts.
In Linden lab, about 80% of the money comes from
Gajendra et al
land and land maintenance fees and 20% comes from
subscriptions. Users have to pay a US$ 9.95 per month
as a subscription fee if they want to own land. The main
competitors of Second Life are There.com and Active
Worlds. Timeless Prototype is a Second Life resident
who is a programmer in real life at a British digital media
company, says “If you run a good shop in Second Life,
you can earn a good living and can trade that cash out for
US$ via LindenX”. Charities have also helped to raise
fund in Second Life. The American cancer society raised
about US$ 41,000 with Second Life.
From a business perspective the most attractive thing
about Second Life is that it is a ready made platform for
creating 3D contents. The Second Life environment is
perfect for “rough prototyping” says Terry Beaubois, an
architect who runs the creative Research Lab at Montana
State University. Second Life economy is real and so are
the profits. Residents buy and sell virtual land, open
shops and work in night clubs. Moreover, they form
business partnership and start business ventures. Good
builders can always make money by building and selling
houses, jewelry and so on. Good scripters are as
important as builders. Designing clothes and hair makes
real life income in Second Life. Nightclubs and Strip clubs
also make profit in Second Life. Building, scripting and
selling is the best way to make revenue.
E-business case analysis of real world companies in
Second Life
Second Life is becoming an online destination of choice
for renowned companies to test and sell new products
and to promote their brands. The big companies can
examine market for future product creation and host
events to promote the brand. The well known real world
companies entering to Second Life are Sun
Microsystems, Warner Brothers Records, American
Apparel, Adidas and Toyota. In October 10, 2006, Sun
Microsystems hold a first press conference with John
Gage, Chief Scientists of the company. Warner Brothers
promoted singer’s Album in Second Life. American
Apparel launched a virtual store of clothes on July 2006.
Adidas have been offering gym shoes in Second Life.
The company tests market styles before rolling them out
in the real world to check the color and design. Starwood
Hotel was opened in 2007 in Second Life. It has tested
architectural designs and furniture choices in online
environment before building the physical hotels. Toyota
offers virtual version of its cars in Second Life. Reebok
designs shoes in Second Life and people wear the same
design in real life and Second Life. Educational
institutions such as Darmouth College have presence in
Second Life. The college conducts emergency response
exercises in the virtual environment.
Big media such as Reuters made its presence in
Second Life in October 2006. The users are growing at
7
about 38% over month, according to Linden Lab, the
overall controller of Second Life. Companies like BBC
Radio had created events and design buildings inside
Second Life. Media companies face competition inside
virtual world including new world notes and Second Life
Herald. Mr. Adam Pasick is the Reuters fulltime technical
reporter in Second Life. The Reuters also offers market
information such as exchange rate between Linden dollar
and US dollar and number of US dollars spent by players
in Second Life in 24 hours. “Second Life is a really hot
economy” says Pasick. Another company CNET thinks
Second Life as a suitable way to promote its online
features. CNET hold questions and answer session to
ask questions to the CEO of Linden Lab in October 16,
2006. Video and podcasts are popular communication
media for presentation. In this connection, Second Life
offers more features and options for businesses. Mr.
David Fleck, the Vice President of Marketing of Linden
Lab says that “We are this canvas that allows companies
to do what they want to do in Second Life and it mimics
real life much more accurately”.
Major organizations utilizing Second Life can be
categorized into following categories:
1)
2)
3)
4)
Nissan
5)
6)
Collaboration: IBM
Research and concept testing: Nissan
Simulation and prototyping: Starwood
Events, brand promotion: Coca Cola, Mazda,
Political organization: Sweden Embassy
Education and training: Harvard Law School
RESULTS AND DISCUSSION
Summary of the findings
Virtual world such as Second Life is the most popular
web based community where users socialize, play games
and sell products to imaginary people. Increasingly, techsavvy businesses are using virtual worlds to design,
create and test product concepts before they launch in
the real world. The crucial advantage to working in virtual
world is that they offer much more potential for customers
to interact with new products. Working in virtual worlds
help to solve the real world problems.
Table 2 shows the summary of results of e-business
experiences of residents in Second Life. Communication
in Second Life plays pivotal role for social networking and
business. Real estate business is successful in Second
Life. Performing business is inexpensive and favorable
for prototyping and collaboration. Traditional media have
been replaced by virtual world. Second Life marketing is
stable and it has self sustaining economy. Some
challenges are privacy and secrecy of information during
communication as all the information goes through
Linden server. The learning curve is higher than other
8
Info. Technol. Res. J.
Table 2. Summary of result on e-business experience
Resident
Amiee weber
Timeless
Prototype
Terry Beaubois
Yarmis
Paul Steinberg
Fred Fuchs
Brouchould and
Kandy
Curet
Adam Pasick
Nappy Bread
Znethady Isbell
Kamichat
Watson
Chris Melissinos
Spelier
Zac Su
Laszlo
June People
Carlos Krefft
Andrew Mallon
Daniel Terdiman
Experience
Conducting real estate business and has virtual clothing stores.
Programmer in real life. People can have good living in SL if can run better shops.
Architect. SL economy is real and so are the profits
Should understand what virtual worlds offer today and spend a lot of time. Virtual
world is relatively inexpensive.
Engineer in Intel. Business in SL is a big understanding. Manufacturing,
distribution and sales are the major part.
Ease of prototyping and collaboration. Drawbacks are privacy and secrecy.
Designer. SL provides free designing opportunities. He owns his own island.
Brought private real estate business. Has designing skill
SL has a real and hot economy. It helps to increase real world business.
SL is similar to real world and has whole culture and economy. SL itself has self
sustained economy
SL has a new way for businesses to reach customers. It’s time consuming but has
real effect on real life.
Artists, entertainers and creative people can earn good money in SL
Business need to be very careful as conversations in SL is not safe.
Virtual worlds have a good future. Internet is serving as a communication channel.
Opportunity to engage customers offering virtual products. SL will dominate 3D
internet.
Place for making money and business but the learning curve is high.
SL marketing is community focused and different from traditional media. Griefing
is the major problem.
Took participation in SL job fair. Good communication and appearance helps to
find job in SL.
Founder of Social Research Foundation. Residents create the contents, value
them and commerce. Mid 30’s are active and successful residents in SL. Real
world companies have excellent opportunities to generate profits due to low
investment cost.
SL is flexible and user controlled. Not only game focused. SL market is stable so
low risk. If have talent possibility to generate revenue.
virtual worlds. Second Life being an emerging technology
has maintained a superior position in 3D internet..
Second Life has whole culture and economy inside. It
saves time, money and increases productivity. Second
Life is a platform for building community, get information
and buy products and services and becoming a reliable
communication channel. Games are helpful to generate
real revenue. Communication plays a significant role for
establishing collaboration between producers and
consumers to generate business value and it reduces
real world cost. Communication is required to receive
product feedback, build community, engage and raise
funds. Moreover, the implication of communication is in
brand promotion, organizational information and training
and learning skills. As a result, Second Life has been
replacing traditional advertising. Web based technologies
are useful to create new e-commerce for income
generation and customer interaction and participation.
Word of mouth communication in this connection is
beneficial for consumer learning. Better the relationship
with consumers, better the market. So virtual
communication provides advantages to customers,
suppliers, business partners, managers and researchers.
Managers prefer rich medium such as face to face
communication for interaction. Second Life provides
synchronous communication for prompt decision making.
Quality of product is important in virtual world as in
real world. Customer attraction strategies are advertising
inside and outside Second Life. Customer traffic is
important to increase the business volume. For this,
some companies offer free products in Second Life.
Sales channels in virtual world as well as on website can
be used. Customer service is vital in virtual world to
improve and extend business. Skill is required for
Gajendra et al
9
Table 3. Activities of real world companies in second life.
Companies
IBM
Sun Microsystems
Warner Brothers
American Apparel
Adidas
Starwood Hotel
Toyota
Reuters
CNET
Dutch Amro Bank
Social
Research
Foundation
Peugeot
Activities/Products
Meeting and conferences, IT
Conference
Promotion of Singer’s Album
Virtual store of clothes
Shoes
Architectural design
Virtual version of cars
Media. Offers marketing information
Promote online products
Connect customers and help events to attract visitors
Corporate marketing
Offer vehicles for test drive
building, scripting and developing virtual lands. Initial
investment is obligatory to open business. Some of the
business sources are retail stores, services, real estate,
universities, insurance companies and media. Some of
the virtual business problems are viewer session
crashed, low viewer frame rates, server capacity, griefers
and language.
Table 3 presents the activities of well renowned real
world companies in Second Life. Real world companies
use Second Life for marketing and brand promotion.
Online events such as video conference and meeting are
highly successful to promote brand of the products and
services. The companies can target customers by
learning their demands. Business owners are able to
provide business consultations, market surveys, virtual
office design and buildings. Like real world, Second Life
has competition of products and services. Residents can
visit competitor’s location to evaluate quality of the
products. Providing more than one product category can
increase sales volume. However, providing a single
product helps to promote its brand and customers easily
recognize that product. The customer benefit focuses on
quality which includes design, beauty and user friendly.
Second Life has less impact of fast delivery and low
price. Many companies provide free products to increase
customer traffic. Like traditional business, customer
service such as getting feedback, satisfaction guarantee
and refund for damaged products is important in Second
Life. Advertising is beneficial in both inside and outside
virtual world. The outside world includes website and
blogs. Important factors on business promotion are traffic
volume, keyword for advertisement, demonstration of
products and customer survey after purchase. There are
two sales channels in Second Life: stores in Second Life
and third party purchase. Customers can use both of
these channels. The need of multiple contact points, 3D
modeling and customer accessibility should be
considered. Virtual business greatly effects real world
economy. Second Life communication is thus a powerful
option for real world companies, business representatives
and players.
The companies have been using Second Life for
technological development, brand promotion, resource
management and business strategy. Furthermore, some
of them are using Second Life for prototyping. The
products information and trainings through presentations
and online demos help to reduce real word cost. Thus
companies are making social network among users
which have facilitated to increase customer relations and
have direct impact on real world business.
Communication plays crucial role to perform all business
activities in Second Life.
Online events such as conference, training and lecture
are highly effective for real world companies to promote
business. Instant messaging is found highly popular to
interact with residents. The voice communication is clear,
reliable and fast. The communication has privacy and
security. Some companies are unsuccessful in Second
Life due to lack of initial investment and enough time
engagement. They consider Second Life only as an
experimental place and do not take it seriously. Quality of
products, customer relationship and after sales service in
Second Life is equally important as in real life for
business promotion. Moreover, category of products,
advertising and consumer traffic has significant effect for
e-business expansion. Thus virtual world business has
direct influence to raise real world economy.
Contributions and implications
This study shows that Second Life is an appropriate
place for communication, social networking and business
promotion. The popularity of Second Life has been
10
Info. Technol. Res. J.
increasing every day. A range of e-business activities
such as buying and selling land, leasing and additional
services
such
as
scripting,
architecture
and
advertisement take place in virtual environment. There is
both real and virtual economy. In addition, Second Life
provides education as well as training opportunities
through effective communication. It offers several
marketing opportunities for real world products and
services. They are able to generate sustained consumer
engagement with a brand. Second Life is emerging as a
test place for new ideas, where real world products can
be released at low cost with direct feedback from users.
There are many opportunities for innovation and profit
making and a lot of e-business opportunities. A number
of residents are making part or all of their real life income
from Second Life businesses. Second Life real estate
market provides opportunities for residents to establish
their own communities and business locations.
Virtual worlds offer a large number of research
opportunities on information system, computer science
and information science. They facilitate numerous
opportunities to build, observe, computing, scripting and
new system development. Moreover, virtual worlds
present project management methodologies and
establish link between virtual and real world. Companies
and organization are using virtual worlds nowadays to
communicate with stakeholders through customer events,
trainings and collaboration sessions. Second Life
combines social and visual components which help to get
resource and cost efficiencies. Many companies are
incorporating virtual worlds activities into their integrated
marketing strategies
Theory of communication and social system provides
great contribution in online as well as material world.
Communication is required for social networking.
Communication allows social interaction. Combination of
two or more individuals forms social system. In business
point of view, sharing information is useful for decision
making. Advertising is also a form of communication
which plays pivotal role for brand promotion and increase
business value. Communication establishes relationship
between producers and consumers. Thus communication
is important for collaboration and coordination. Rich
medium such as voice communication has multiple cues
which is helpful for prompt decision making. Motivation is
required for residents to live in environment for a long
period of time. The motivation is required to eliminate
users’ conservatism, fear of changing the environment
and lack of involvement. Theory of motivation is widely
used to understand information system related human
behavior. Disseminating information through word of
mouth communication is one of the most effective
mediums for relaying important product and company
information. Word of mouth has been affecting people
and organizations. Word of mouth marketing which
comprises a variety of subcategories such as buzz, blog,
viral, grassroots, brand advocates, cause influencers and
social media marketing. Because of the personal nature
of the communications between individuals, it is believed
that product information communicated in this way has an
added layer of credibility. Word of mouth depends on the
extent of customer satisfaction with the product or service
and on the degree of its perceived value.
The outcome of these theories is communication,
public distribution and networking. Social networking and
e-business are the motivating factors for people to join
Second Life. Media richness has importance to make
prompt decision on real world practice. Moreover,
synchronous communication is needed for organizations,
managers and policy makers. The current research is
influenced by a need to understand the roles of effective
communication in business. The study has key
implications for practice. First, the findings suggest that
Second Life bears high social and business responsibility
than other social networking websites such as Facebook,
Myspace, Twitter and Youtube. Second, this study shows
that the communication is a key part that confers
standing and existence of virtual worlds.
CONCLUSIONS
Second Life is believed as a must trusted and reliable
communication medium. The success of social
networking and online business in virtual world depends
upon the reliability of communication. Social networking
is becoming one of the inseparable parts of the ebusiness. Second Life has become a platform for
collaboration and business that removes geographic
constraints through effective communication. Thus it
reduces real world cost to meet global participants in one
platform. Like the real world or the web, many residents
play with creation, using the virtual world as a medium for
communication
and
expression.
People
and
organizations who build businesses are successful to turn
their activities within Second Life. Second Life
communication is synchronous that facilitates for effective
communication among residents. Second Life is a part of
the solution to communication and organizational
challenges.
Second Life bears high social and business
responsibility than other social networking sites. Instant
messaging was more popular for general users. Video
conferencing was the choice of real world companies to
conduct online business events. Initial fund investment,
adequate time engagement and quality as well as
multiple categories of products are equally important in
Second Life as in real world. In addition, advertising,
customer relation, after sales service and consumer
traffic are crucial for e-business promotion. Individual and
big companies use virtual worlds as a bridge to their
current real world business and drawing much attention
of both managers and researchers. This study may have
some limitations. The research is based on a conve-
Gajendra et al
nience sample of Second Life users, which is only one of
various existing virtual world. So the generalizability of
the study is limited. The possibility of the existence of the
common method bias can not be completely eliminated.
Since Second Life is still in the developing stage, future
recommendation is provided to study e-business
possibilities on Second Life through online survey from
professional Second Life users.
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